In early 2010, Manchester City began a series of financial arrangements later described as a disguised funding scheme.
The club entered into sponsorship agreements at record levels, well above fair market value.
According to the ruling, these deals were structured in two parts: a base fee and a “tagged sum”.
The sponsor would pay the base fee, while the club’s owners would cover the tagged sum.
As a result, the sponsors did not pay the full contractual value. The owners funded the majority of the amount, allowing City to direct substantial resources toward player investment.
The document stated that this structure “gave the misleading impression to third parties (including regulators and its auditors) in its financial statements and any required FFP returns that its commercial revenues from sponsorship agreements were far, far greater than was in fact the case”.
The scheme was also adjusted over time, according to the ruling, “to assist with continued concealment” and “reduce the likelihood of difficult questions being asked”.
Commercial income from sponsors between the 2009-10 and 2017-18 seasons was recorded at £949.94 million.
The ruling found that only £119.25 million of that total represented base fees.
The remaining £830.69 million was made up of tagged sums, effectively paid by the club’s owners.
Manchester City has denied the allegations, arguing that the Premier League had misunderstood the sponsorship agreements.
The panel rejected that explanation as untrue and said it was “concocted well after the event in an attempt to obscure and conceal the realities of the disguised funding scheme”.
One cited example involved an unexpected shortfall in May 2013.
Less than a week before the end of the 2012-13 financial year, the club reportedly realised it was £9.9 million short of meeting UEFA’s financial rules.
Within days, without sponsors being approached, modified sponsorship agreements were created that increased recorded sponsorship income. These adjustments included payments for bonuses tied to events that had already occurred and a US tour.
The anticipated UEFA Financial Fair Play shortfall was thereby addressed.
